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06/14/2001

Global Warming, Update

Global warming is back in the news, in a big way, with President
Bush''s trip to Europe. Thanks to his all-too-public scrapping of
the Kyoto Protocol of 1997 this past March, our European allies
are in a tizzy over what to do next.

But first a brief review (I last wrote on this topic 11/30/00).
In 1997 over 100 nations reached agreement on a framework for
reducing the amount of greenhouse gases, specifically carbon
dioxide (CO2), by 5-7% from 1990 levels by the year 2012.

At the time the treaty was viewed by the U.S. Senate as being
unfair because of the perceived economic burden that would be
placed on the U.S., so it voted 95-0 to reject it (enough of a
signal to the Clinton administration to recognize that bringing it
to the floor for formal consideration would be a futile move).
Importantly, not one industrialized nation''s legislature approved
it either. But Kyoto was intended to be a framework for further
discussion.

Last fall, the U.S. and Britain appeared to have worked out an
agreement on the issue of carbon credits, whereby nations could
exchange market-based instruments in order to meet their agreed
upon CO2 limits. [Cultivating forests, for example, may garner
one a credit to be applied against emissions.] But at the last
minute, the European Union scotched the plan, principally at the
behest of Germany and France, primarily due to the large Green
Party presence in both.

The National Environmental Trust, a U.S. group, said at the time,
"This was Europe''s best chance to achieve a strong climate
treaty, and they decided to pass it up. This window of
opportunity may not come again."

It was thus back to the drawing board. Europe and Asia, though,
assumed the treaty would be renegotiated based on existing
documents as opposed to starting from scratch, a process that
could extend for years. But there are those who say the world
can''t afford to wait any longer to begin addressing the issue.

While there are still those who doubt the significance of global
warming, the skeptics are becoming fewer and fewer. No one
can dispute, for example, the fact that the 90s was the hottest
decade on record, that some glaciers are disappearing, and that
coral reefs are dying. And there also is little dispute that a
minimum of 6 billion tons of CO2 is spilled into the atmosphere
each year.

While the earth''s temperature has risen only 1 degree over the
past 50 years (did you feel it?), most experts estimate that by
2100 we will see an additional increase of 2.5-10 degrees
Fahrenheit without some change in our behavior. It only took a 9
degrees shift to end the last ice age. And, obviously, if the
projected increase for the next century is greater than a degree or
two, a significant rise in sea levels could lead to a shift of
hundreds of millions of people out of uninhabitable regions, thus
placing a greater strain on already diminishing resources
elsewhere.

The problem for the U.S. in terms of world opinion emanates
from the fact that we produce 25% of the world''s CO2 and
account for 22% of the world''s GDP, while comprising only 4%
of the population. But while we are viewed as the demon, both
the president and the Senate want to make sure that any treaty on
global warming addresses the issue of binding developing
nations, not just industrialized ones, to emissions targets. But the
developing ones (like China and India), with their limited access
to capital and modern technology, won''t find it easy to meet any
treaty requirements without impacting growth. Of course the
growth issue is the one facing the U.S. and the industrialized
nations as well. It''s a "Catch 22."

Last March, before President Bush made his decision to scrap
Kyoto, EPA Commissioner Christine Whitman said that, "Global
warming is one of the greatest environmental issues we face."
At the time Whitman also sent Bush a memo. "Mr. President,
this is a credibility issue for the U.S. in the international
community. It is also an issue that is resonating here at home.
We need to appear engaged." Bush didn''t listen.

The Europeans were furious. Frustrated that because of its size
the U.S. could simply undermine a treaty signed by more than
100 nations, EU Commission president, Romano Prodi, said "If
one wants to be a world leader, one must know how to look after
the entire earth and not only American industry."

Ironically, though, it''s American industry, itself, which is taking
a lead on addressing the issue. Corporate leaders are no
dummies, they recognize that the potential for boycotts against
American companies, worldwide, is growing. [In the issue of
Exxon and its Esso operations in Europe, boycotts have already
been organized.] And multinationals like Dupont argue that if
others move ahead on Kyoto without the U.S., it will hurt our
competitiveness.

Dupont has already been making substantial cuts in its own
greenhouse emissions. It doesn''t take a rocket scientist to
understand that this is an issue that if not addressed would kill a
company''s reputation, as well as hit the shareholders. Others
that have joined Dupont are BP Amoco, Royal Dutch / Shell,
Ford, GM, Enron, Alcoa, and Georgia-Pacific. In the case of the
auto manufacturers (including Toyota and Daimler-Chrysler), the
issue is finally spurring the kind of real innovative change they
should have been involved in a decade ago. Increasingly, you
will see them playing a game of one-upsmanship in promising
more fuel efficient vehicles.

Over the past month or so, President Bush has begun to realize
he overstepped his bounds last March and he quickly
commissioned a study by the National Academy of Sciences
(NAS). The conclusion of the panel was, "Greenhouse gases are
accumulating in earth''s atmosphere as a result of human
activities, causing surface air temperatures and subsurface ocean
temperatures to rise...(and that) national policy decisions made
now and in the longer-term future will influence the extent of any
damage suffered by vulnerable human populations and
ecosystems later in this century."

Meanwhile, Bush has been promoting his long-term energy
proposals, which environmentalists are calling into question,
particularly with its emphasis on the production of coal, oil and
gas-fired power plants. But now, with the release of the NAS
report, the president has to at least alter some of his rhetoric
between energy self-sufficiency and the demands of our allies.
"We will act, learn and act again, adjusting our approaches as
science advances and technology evolves... America''s record on
environmental protection is second to none."

And back to the differences between the U.S. and our European
allies, in particular. One of Bush''s energy proposals calls for
increased use of nuclear power, which obviously doesn''t emit
any greenhouse gases. But just this week, Germany has reached
agreement with its own utilities to phase out the use of nuclear
power over the issue of what to do with the waste.

What it boils down to is the fact that all of us are groping for
solutions, conservatives and liberals, corporations and
environmentalists, the U.S. and its allies. Even an original
skeptic like myself now believes that something has to be done to
address global warming. But it''s going to take a lot of flexibility
on all sides of the issue. Some of the scientific theories are still
in dispute, but should come clearer into focus in fairly short
order. And the developing world, with the industrialized world''s
help on the technology front, is going to have to accept its share
of the responsibility for a solution as well.

In other words, no shortage of material down the road for the
editor!

Sources:

Katharine Seelye / New York Times
Andrew Revkin / New York Times
David Sanger / New York Times
Edmund Andrews / New York Times
Nancy Dunne / Financial Times
John Carey / Business Week
Michael Lemonick / Time
Norbert Walter / Deutsche Bank

Note: Sources were used primarily for the purpose of pulling
some quotes together.

Brian Trumbore





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Hot Spots

06/14/2001

Global Warming, Update

Global warming is back in the news, in a big way, with President
Bush''s trip to Europe. Thanks to his all-too-public scrapping of
the Kyoto Protocol of 1997 this past March, our European allies
are in a tizzy over what to do next.

But first a brief review (I last wrote on this topic 11/30/00).
In 1997 over 100 nations reached agreement on a framework for
reducing the amount of greenhouse gases, specifically carbon
dioxide (CO2), by 5-7% from 1990 levels by the year 2012.

At the time the treaty was viewed by the U.S. Senate as being
unfair because of the perceived economic burden that would be
placed on the U.S., so it voted 95-0 to reject it (enough of a
signal to the Clinton administration to recognize that bringing it
to the floor for formal consideration would be a futile move).
Importantly, not one industrialized nation''s legislature approved
it either. But Kyoto was intended to be a framework for further
discussion.

Last fall, the U.S. and Britain appeared to have worked out an
agreement on the issue of carbon credits, whereby nations could
exchange market-based instruments in order to meet their agreed
upon CO2 limits. [Cultivating forests, for example, may garner
one a credit to be applied against emissions.] But at the last
minute, the European Union scotched the plan, principally at the
behest of Germany and France, primarily due to the large Green
Party presence in both.

The National Environmental Trust, a U.S. group, said at the time,
"This was Europe''s best chance to achieve a strong climate
treaty, and they decided to pass it up. This window of
opportunity may not come again."

It was thus back to the drawing board. Europe and Asia, though,
assumed the treaty would be renegotiated based on existing
documents as opposed to starting from scratch, a process that
could extend for years. But there are those who say the world
can''t afford to wait any longer to begin addressing the issue.

While there are still those who doubt the significance of global
warming, the skeptics are becoming fewer and fewer. No one
can dispute, for example, the fact that the 90s was the hottest
decade on record, that some glaciers are disappearing, and that
coral reefs are dying. And there also is little dispute that a
minimum of 6 billion tons of CO2 is spilled into the atmosphere
each year.

While the earth''s temperature has risen only 1 degree over the
past 50 years (did you feel it?), most experts estimate that by
2100 we will see an additional increase of 2.5-10 degrees
Fahrenheit without some change in our behavior. It only took a 9
degrees shift to end the last ice age. And, obviously, if the
projected increase for the next century is greater than a degree or
two, a significant rise in sea levels could lead to a shift of
hundreds of millions of people out of uninhabitable regions, thus
placing a greater strain on already diminishing resources
elsewhere.

The problem for the U.S. in terms of world opinion emanates
from the fact that we produce 25% of the world''s CO2 and
account for 22% of the world''s GDP, while comprising only 4%
of the population. But while we are viewed as the demon, both
the president and the Senate want to make sure that any treaty on
global warming addresses the issue of binding developing
nations, not just industrialized ones, to emissions targets. But the
developing ones (like China and India), with their limited access
to capital and modern technology, won''t find it easy to meet any
treaty requirements without impacting growth. Of course the
growth issue is the one facing the U.S. and the industrialized
nations as well. It''s a "Catch 22."

Last March, before President Bush made his decision to scrap
Kyoto, EPA Commissioner Christine Whitman said that, "Global
warming is one of the greatest environmental issues we face."
At the time Whitman also sent Bush a memo. "Mr. President,
this is a credibility issue for the U.S. in the international
community. It is also an issue that is resonating here at home.
We need to appear engaged." Bush didn''t listen.

The Europeans were furious. Frustrated that because of its size
the U.S. could simply undermine a treaty signed by more than
100 nations, EU Commission president, Romano Prodi, said "If
one wants to be a world leader, one must know how to look after
the entire earth and not only American industry."

Ironically, though, it''s American industry, itself, which is taking
a lead on addressing the issue. Corporate leaders are no
dummies, they recognize that the potential for boycotts against
American companies, worldwide, is growing. [In the issue of
Exxon and its Esso operations in Europe, boycotts have already
been organized.] And multinationals like Dupont argue that if
others move ahead on Kyoto without the U.S., it will hurt our
competitiveness.

Dupont has already been making substantial cuts in its own
greenhouse emissions. It doesn''t take a rocket scientist to
understand that this is an issue that if not addressed would kill a
company''s reputation, as well as hit the shareholders. Others
that have joined Dupont are BP Amoco, Royal Dutch / Shell,
Ford, GM, Enron, Alcoa, and Georgia-Pacific. In the case of the
auto manufacturers (including Toyota and Daimler-Chrysler), the
issue is finally spurring the kind of real innovative change they
should have been involved in a decade ago. Increasingly, you
will see them playing a game of one-upsmanship in promising
more fuel efficient vehicles.

Over the past month or so, President Bush has begun to realize
he overstepped his bounds last March and he quickly
commissioned a study by the National Academy of Sciences
(NAS). The conclusion of the panel was, "Greenhouse gases are
accumulating in earth''s atmosphere as a result of human
activities, causing surface air temperatures and subsurface ocean
temperatures to rise...(and that) national policy decisions made
now and in the longer-term future will influence the extent of any
damage suffered by vulnerable human populations and
ecosystems later in this century."

Meanwhile, Bush has been promoting his long-term energy
proposals, which environmentalists are calling into question,
particularly with its emphasis on the production of coal, oil and
gas-fired power plants. But now, with the release of the NAS
report, the president has to at least alter some of his rhetoric
between energy self-sufficiency and the demands of our allies.
"We will act, learn and act again, adjusting our approaches as
science advances and technology evolves... America''s record on
environmental protection is second to none."

And back to the differences between the U.S. and our European
allies, in particular. One of Bush''s energy proposals calls for
increased use of nuclear power, which obviously doesn''t emit
any greenhouse gases. But just this week, Germany has reached
agreement with its own utilities to phase out the use of nuclear
power over the issue of what to do with the waste.

What it boils down to is the fact that all of us are groping for
solutions, conservatives and liberals, corporations and
environmentalists, the U.S. and its allies. Even an original
skeptic like myself now believes that something has to be done to
address global warming. But it''s going to take a lot of flexibility
on all sides of the issue. Some of the scientific theories are still
in dispute, but should come clearer into focus in fairly short
order. And the developing world, with the industrialized world''s
help on the technology front, is going to have to accept its share
of the responsibility for a solution as well.

In other words, no shortage of material down the road for the
editor!

Sources:

Katharine Seelye / New York Times
Andrew Revkin / New York Times
David Sanger / New York Times
Edmund Andrews / New York Times
Nancy Dunne / Financial Times
John Carey / Business Week
Michael Lemonick / Time
Norbert Walter / Deutsche Bank

Note: Sources were used primarily for the purpose of pulling
some quotes together.

Brian Trumbore